Reap What You Sow: American Soybean Farmers are Paying the Price for Trump’s Trade War

By: Greyson Beaubien

Photo by Illinois Soybean Association

Since taking office, President Trump has pursued an aggressive tariff policy against China, the exact details of which are changing almost daily. After China introduced new export controls on essential rare earth minerals, President Trump responded by announcing a new 100% tariff on imported Chinese goods "over and above any Tariff that they are currently paying," effective November 1st. This convoluted and escalating feud may not have any winners yet, but it certainly has losers.

The trade war with China has pushed the American soybean industry to the brink. Retaliatory tariffs as high as 34% have made American soybeans uncompetitive in the Chinese market. In 2024, China purchased $12.6 billion of American-grown soybeans, accounting for half of all US exports of the crop. Until this week, that number in 2025 was $0. Despite the modest resumption in Chinese purchases, the result has been a crisis in the American soybean industry. 

To add insult to injury, the Trump administration pledged to bolster Argentina’s economy with a $20 billion currency swap, designed to stabilize the volatile Argentine peso. The same day, the Argentinian government temporarily suspended export taxes on many agricultural products, including soy. In the three days following the suspension of the export tax, China purchased more than 1.3 million metric tons of Argentine soybeans. Since then, Treasury Secretary Scott Bessent has promised an additional $20 billion in financing from a mixture of sovereign and private sector funds, bringing the total American aid to a staggering $40 billion. While American soybean farmers scramble to find new buyers outside the Chinese market, the Trump administration gave a lifeline to one of their biggest competitors.

Now, White House officials are reportedly planning to bail out the soybean industry via direct payments to farmers totaling up to $15 billion. Whether the Trump Administration can actually implement this policy remains uncertain. This is not the first time that Trump tariffs have resulted in agricultural bailouts: in Trump’s first term, his administration distributed more than $23 billion in farm aid. However, the Department of Agriculture’s Commodity Credit Corporation fund, used in previous farm subsidies, has been depleted to around $4 billion. The Trump administration has also floated the idea of using tariff revenue to offset the costs associated with these measures. Yet, this solution faces a significant obstacle: it would require congressional approval, which is currently impossible due to the ongoing government shutdown. 

Many farmers are worried that federal aid won’t be enough. Matt Rehberg, a farmer and the vice president of the Wisconsin Soybean Association, did not mince words when describing the prospect of a bailout: “We want markets. Markets are consistent. We can bet on them. When you go to these ad hoc bailout programs, they definitely help. But it’s kind of like putting a Band-Aid on a gunshot wound.” The Trump Administration is in an unenviable position of trying to cobble together an expensive bailout that will not solve any of the underlying problems.

This entire saga has been a self-inflicted disaster. There already exists a robust international demand for American soybeans, but reckless tariff policy has closed farmers' access to this market. With the government shutdown and Congress in a stalemate, farmers cannot expect to receive federal funds any time soon. In the meantime, countries like Argentina and Brazil are filling international demand for soybeans at the expense of US farmers. When help does eventually arrive, taxpayers will be responsible for solving an entirely preventable problem. American farmers were able to weather the worst of Trump’s tariff policy in the first term. There is no guarantee that they will survive a second time.

The views expressed in this publication are the authors' own and do not necessarily reflect the position of The Rice Journal of Public Policy, its staff, or its Editorial Board.

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